The U.S. Chamber of Commerce says the current minimum capital requirement for wholly owned or businesses with foreign investor interest in Ghana must be reviewed.
According to the chamber, Ghana’s minimum capital requirement for foreign businesses serves as a disincentive to foreign investor interest in the country contributing to the reduction in foreign direct investments into Ghana.
Under the new GIPC Act, 2013 (Act 865), the minimum capital required for retail business had been moved from 10,000 dollars to 1 million dollars, while foreign investors who participate in enterprises have to show a minimum capital of 200,000 dollars with wholly owned foreign enterprises showing a minimum capital of 500,000 dollars.
Speaking at the sidelines of a press briefing on the U.S.-ECOWAS Business Initiative (USEBI) the Vice President, African Affairs of the U.S. Chamber of Commerce Scott Eisner said though there is high investor confidence in Ghana, the GIPC needs to revise its minimum capital requirement.
“By and large there is still a significant amount of investor confidence in Ghana even though there is still some challenges about the new capital requirement that the GIPC has put in place either for joint venture or wholly owned subsidiaries but if you want to encourage growth of SME’s to be the market place, they don’t have some 500,000 dollars sitting down which will dissuade investor opportunities to engage in the local market.
If the government’s objective is to encourage foreign direct investment you need to recognize what the impact is going to be on foreign investors as high capital requirements without much clarity of the future of what that is going to mean it is going to propose some challenges.”
He said. For us, some of the new regulations and requirements are definitely a big challenge for the SME’s though for some of the larger companies, it’s not an issue, Vice President African Affairs of the U.S. Chamber of Commerce Scott Eisner said.
The U.S.-ECOWAS business Initiative is to serve as a trade and advocacy coalition created through a partnership between the U.S. Chamber of Commerce and the Economic Community of West African States (ECOWAS).
USEBI will aim to promote trade and strengthen economic and commercial ties between the United States and ECOWAS.
Source: citifmonline